Once upon a time, luxury and super luxury apartments, worth Rs 1 crore and above, were quite in demand in Pune. During the boom period of the real estate sector, these apartments were, sometimes, more in demand than lesser-priced ones. But the sector has faced strong headwinds in the last two years, and the demand for such apartments has dipped significantly.

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As per data collated by real estate consultancy firm Knight Frank, fewer than 10 per cent of residential units launched in the last two years were in this niche price range. In 2016, Pune had seen the launch of over 20,000 such units, while in 2017, only 12,705 units were launched, said Paramvir Singh Paul, branch director of Knight Frank, Pune.

In fact, 2017 was quite a dismal year for the luxury segment, as the first half of the year didn’t see the launch of a single luxury apartment. At the end of the year, luxury apartments formed just one per cent of the total launches. (See Box) “The number of such launches have come down as builders have become more cautious. Most builders have stopped launching new projects as they want to finish their current projects first,” said Singh Paul.

After the introduction of MahaRera, the state regulator for the real estate sector, most builders have started diverting funds to finish their ongoing projects, as they will have to pay a hefty penalty in case of a delay in possession. On the other hand, launches of residential units in the affordable segment of — apartments priced below Rs 25 lakh — have picked up substantially. “The general uncertainty in the market has dampened people’s tendency to invest in the real estate sector, and that is reflected in the luxury sector as well,” said Singh Paul.

Shrikant Paranjape, president of CREDAI-Pune Metro, believes that fewer launches in the luxury segment was a reflection of the changing nature of the real estate market in the city. Over the last two years, real estate has lost its edge as an investment tool, with other options such as the stock market or mutual funds taking over, he said.

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“Luxury and super luxury segments used to see a lot of traction from investors… but with that option losing its sheen, the number of launches has decreased,” he said